This is the final installment of the Center for Medicare Advocacy's summary of provisions from the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), Pub. Law 110-275.  The three previous installments are available on the Center's Weekly Alerts page.

This installment focuses on MIPPA provisions related to Medicare Part C (Medicare Advantage) and Medicare Part D, the Medicare prescription drug program.  Of particular interest are the revisions to requirements for private fee-for-service (PFFS) plans, changes to some payments for Medicare Advantage plans, and changes to Part D formulary requirements.

Provisions Relating to Part C (Medicare Advantage)

• Section 103(c).  Required inclusion of plan type in plan name.  For plan years beginning on or after January 1, 2010, a Medicare Advantage (MA) organization must ensure that the name of each MA plan offered by the MA organization includes the type of plan (using standard terminology developed by the Secretary).
   

• Section 161. Phase-out of indirect medical education (IME) payments.  Beginning with 2010, the Secretary shall adjust the applicable IME for a given geographic area each year to exclude the phase-in percentage for the Secretary’s estimate of the standardized costs for payments to Medicare Advantage (MA) plans. The effect of the ratio is to phase out a higher proportion of IME costs in areas where IME is a smaller percentage of per capita spending in traditional Medicare.  This provision will not apply to the benchmarks for plans in the Programs of All-Inclusive Care for the Elderly (PACE). The phase-in amount will be based on a ratio of a specified percentage (0.60 percent in the first year) relative to the proportion of per capita costs in original Medicare in the county that IME costs represent. The phase-out eliminates double payments to MA plans but does not eliminate payments made directly to teaching hospitals under traditional Medicare.
   

• Section 162. Revisions to requirements for Medicare Advantage (MA) private fee-for-service plans.  For plan year 2011 and subsequent plan years, an MA private fee-for-service (PFFS) plan operating in a network area must meet the access standards in that area by entering into written contracts with health care providers.  PFFS plans will not be able to meet the required access standards by establishing payment rates that are less than those paid under original Medicare or by developing contracts and agreements sufficient to provide services under a plan.  Beginning in 2010, any PFFS plan that chooses to contract with a category of providers is required to meet the same general access to services requirements applicable to that category of providers.  Non-employer sponsored MA PFFS plans are required to establish provider networks in areas defined as having at least two plans with networks such as health maintenance organizations (HMOs), provider sponsored organizations (PSOs), or local preferred provider organizations (PPOs). In areas without at least two network-based plans, the non-employer PFFS plans will retain the ability to establish access requirements through payment rates that are not less than those under traditional Medicare.
   

• Section 163. Revisions to quality improvement programs.  For plan years beginning on or after January 1, 2010, MA PFFS and Medicare Medical Savings Accounts (MSAs) are required to have a quality improvement program. In addition, the data collection requirements for MA regional plans, MA PFFS, and MSA plans are not to exceed those applicable to MA local plans that are preferred provider organization (PPO) plans, and except for plan year 2010, providers that have contracts with PPOs will only have to submit administrative claims data.
   

• Section 166. Adjustment to the Medicare Advantage stabilization fund.  This fund is used for incentives for plans to enter the MA program and to retain them.  Use of the initial funding is extended through December 31, 2014, although the amount in the fund has been reduced to $1.00.
   

• Section 168.  MedPAC study and report on quality measures.  This provision calls for a study by the Medicare Payment Advisory Commission (MedPAC) on how comparable measures of performance and patient experience can be collected and reported by the year 2011 for MA plans and for the traditional Medicare program (Medicare Parts A and B).  The report is to address technical issues such as data requirements and quality benchmarks across MA plans and under traditional Medicare.  The report and its recommendations are to be submitted to Congress by March 31, 2010.
   

• Section 169.  MedPAC study and report on Medicare Advantage payments.  This provision requires MedPAC to conduct a study of the costs that MA organizations incur in providing coverage under their plans for items and services covered under traditional Medicare program as reflected in plan bids.  MedPAC is also to study county-level spending under traditional Medicare on a per capita basis, as calculated by the Chief Actuary for CMS.  The report is to include alternate approaches to payment and identify ways to make payment improvements.  The report, with recommendations, is to be presented to Congress no later than March 31, 2010.
   

• Section 186. Demonstration to improve care to previously uninsured. Within one year after enactment, the Secretary is to establish a two-year demonstration project to determine the greatest needs and most effective methods of outreach to Medicare beneficiaries who were previously uninsured.  The demonstration will be in no fewer than 10 sites and will include state health insurance assistance programs, community health centers, community-based organizations, community health workers, and other service providers under Medicare Parts A, B, and C.  The Secretary is to submit a report on the outcomes of the demonstration to Congress within one year of the completion of the project.

Provisions Related to Part D

• 175.  Inclusion of Barbiturates and Benzodiazepines as covered Part D drugs. Effective for prescriptions dispensed on or after January 1, 2013, plans will be required to cover benzodiazepines. They will also be required to cover barbiturates if they are used in the treatment of epilepsy, cancer, or a chronic mental disorder.
   

• 176.  Formulary requirements with respect to certain categories of or classes of drugs.   Beginning with plan year 2010, the Secretary shall identify categories and classes of drugs for which both the following criteria are present: (1) restricted access to the drug or class would have major or life threatening clinical consequences for individuals who have a disease or disorder treated by the drugs in such category or class and (2) there is a significant clinical need for such individuals to have access to multiple drugs within a category or class due to unique chemical actions and pharmacological effects of the drugs within the category or class, such as drugs used in the treatment of cancer.  For these drugs, PDP sponsors offering prescription drug plans will be required to include all covered part D drugs in the categories and classes of drugs as required above.  In addition, the Secretary may establish exceptions processes that permit a PDP sponsor of a prescription drug plan to exclude from its formulary a particular covered part D drug (or limit access to such drugs, including through prior authorization or utilization management).  Exceptions processes shall be established based upon scientific evidence and medical standards of practice (and, in the case of  HIV AIDS drugs, must be consistent with the Secretary’s Guidelines for the Use of Antiretroviral Agents in HIV-1 Infected Adults and Adolescents) and include a public notice and comment period.
   

• Section 181.  Use of Part D data.  Effective upon enactment, this provision allows the Secretary to use data from Part D (prescription drug) contracts for purposes of improving health through research on the utilization, safety, effectiveness, quality, and efficiency of health care services as the Secretary determines to be appropriate.  Data shall be made available to Congressional support agencies as required by various enabling legislation for the purposes of conducting Congressional oversight, monitoring, analysis, and making recommendations concerning the Part D program. 

Conclusion